Of consolidating student loans
Of consolidating student loans - online dating in the world
For example, if you have Parent PLUS loans for a child and individual loans that you took out for your own education, you shouldn’t consolidate them, says Adam Minsky, a lawyer in Boston who specializes in student debt.That’s because Parent PLUS loans are not eligible for several types of income-driven repayment, and they carry that restriction with them in a consolidation, causing your student loans to lose those options, as well. Consolidation can affect your eligibility for forgiveness.
Historically, that may have been accurate, since consolidation was often used as a way to lock in a low interest rate on variable-rate loans, says financial aid expert Mark Kantrowitz.
College students can take out new loans each year they’re in school, so by the time graduation comes, it’s common to have half a dozen, or more, individual loans.
Each of them may have different terms, including interest rates.
Once you leave the federal program, you can’t return and are no longer eligible for one of its income-driven repayment plans.
Private consolidation is a completely different story, though.
In cases like this, consolidating your student loans could help you manage your loans more efficiently. Here’s what to keep in mind before you dive into student loan consolidation.
If you have multiple federal student loans and want to simplify your payments, consolidating can be a smart strategy.Borrowers sometimes use the terms “consolidate” and “refinance” interchangeably when talking about their federal loans. You can consolidate but not refinance your federal loans within the federal system—to refinance, you have to go to a private lender.Consumer advocates caution that there’s a serious downside to moving to a private lender, even though you might get a slightly lower interest rate.This can make keeping track of your total debt, minimum payments, and monthly due dates confusing.Sometimes it might even cause you to miss payments.Be wary of consolidating if you’ve already made progress toward loan forgiveness under the 10-year period for public sector employees or the 20-year period under income-driven plans.